JESSICA van VONDEREN: A Commission of Inquiry has begun hearing evidence about the health payroll bungle that will cost the state one point two billion dollars, and caused untold distress and disruption to staff. The five million dollar Inquiry is trying to work out what went wrong starting this week with the procurement process that saw I-T giant IBM win the contract. Eric Tlozek was at the hearings.

ERIC TLOZEK: This is what five million dollars looks like, when you package it up and turn it into a Commission of Inquiry; lots of documents, for lots of lawyers. The Commission's been trawling through the procurement and contract records of the Queensland Health payroll system to investigate how IBM won the contract for its upgrade; a contract that hasn't yet let the Government recoup any of the massive cost when the system failed.

RICHARD CHESTERMAN, QC INQUIRY COMMISSIONER: The Inquiry is to determine why such large amounts of money have been lost to the public, whether anything might be recovered and why such distress was affected on the Queensland health workforce.

(FOOTAGE OF WOMEN WITH PAYSLIP)

ERIC TLOZEK: The distress came from a complicated tangle of overpayments, underpayments and no payments at all.

(MORE FOOTAGE OF PAYSLIPS BEING RECEIVED BY WORKERS)

ROSEMARY ROWE, NURSE, 2010: And friends of mine have given me money to pay my electricity. They've given me money to pay my phone, and I had a friend of mine buy me some food for my dogs.

(FOOTAGE OF HEALTH WORKERS PROTESTING)

ERIC TLOZEK: It's been almost three years and now two Governments but the distress is continuing.

SIMON MITCHELL, NURSING DIRECTOR: In terms of stress, in terms of being able to honour your financial commitments and service your debts, these are effects that to this day live with a lot of nurses and midwives. There is no great confidence in the payroll system.

(MORE FOOTAGE OF PROTESTS)

ERIC TLOZEK: And many health workers who were overpaid are still waiting to find out how much they owe.

BETH MOHLE, QUEENSLAND NURSES UNION: There are still QNU members who are affected by the payroll bungle in so far as there are many who have got overpayments which are still outstanding that they're waiting to repay. The system itself has stabilised somewhat but there's still that absolute significant anxiety that a lot of members are feeling about when they have to repay those overpayments.

ERIC TLOZEK: This isn't the first investigation of the payroll debacle. The Auditor-General released a Report on the implementation of the system, Price Waterhouse Coopers reviewed the Government's approach to payroll upgrades, independent consultants Ernst and Young also reviewed the system and KPMG reviewed the roll-out. But it is the first public Inquiry, and it's initially looking at the purchase of the new payroll system. The first big question for the inquiry is: Should IBM have got the contract? This week that's been difficult to answer. But one of the bureaucrats involved in the tender process raised concerns about the Government's approach. Former Treasury executive Darrin Bond told the Inquiry he had warned his bosses not to bring forward the upgrade in Queensland Health, because it was too big a Department with too many pay awards. His team also assessed part of IBM's bid as being "potentially very high risk". But that changed in a later version, to say it appears to provide a suitable alternative that should generate savings in both the implementation and support effort. Mr Bond said IBM had provided more information, but not any examples as big or complex as Queensland Health.

ERIC TLOZEK: Another team found IBM's bid wouldn't work as well as competing bidder Accenture, and it said Accenture should do the work. But that later changed to say either company could do the job. The bureaucrat in charge who now's the boss of payroll for Queensland Health said he couldn't remember why the changes were made. For others, the big question is whether this five million dollar Inquiry's going to solve anything.

JULIE BIGNELL, TOGETHER UNION: I think what hasn't been dealt with is the culture in Queensland Health and that is a long term proposition. It's not going to be fixed by a public Inquiry. The Inquiry is about distracting people from job cuts and cuts to services in Queensland and what we really want to see is the money from that Inquiry being put towards things that matter for the public and not for an opportunity for the Government to try to distract the public from what's really happening out there.

JARROD BLEIJIE, ATTORNEY-GENERAL: I can assure the public that five million dollars on a Commission of Inquiry is money well spent considering this health bungle's going to cost the taxpayer $1.2 billion at the outset.

ERIC TLOZEK: But the State Government has the previous detailed reports of the failure, and the legal advice given to the previous Government. Neither of which has made it try to recoup the money from IBM.

JULIE BIGNELL: My personal view is given the nature of politicians, if they could have blamed somebody else for this they would have by now and I think if the company could have been sued for something then we would have heard about it a long time before now.

ERIC TLOZEK: But perhaps if the Inquiry can't identify who's to blame, it may help prevent a similar mistake being made in the future.

RICHARD CHESTERMAN QC: I've also been asked to make recommendations to improve the polices, processes and standards applicable to major Queensland Government Information and Technology projects to ensure that in the future high quality and cost effective products and systems are delivered.

ERIC TLOZEK: Saving on both financial and human costs.

SIMON MITCHELL: I think what staff want is an Inquiry that looks at the human factor and not simply one that is looking to sheet blame on the cause of the payroll disaster. What we are more interested in I think is the effect of that disaster and that has been ignored.